Hi, I agree with what you say about the discount to reflect the potential tax on capital gain. That's the reason why I calculated a sum of the parts after potential tax on capital gain (cf GQG thread). Even doing that, the sum of the part (after tax) is over 10 $, vs a share price of 7.36 $.
The question is whether the gap (between 7.36 $ and 10 $+) will close rapidly, when GQG is listed, if it reaches the target valuation of 7.5 bn. I fear that some of the gap will remain if the management of PAC does not do anything about it.
Another way to look at the valuation : they have a P/B of only 0.93, which may seem low. At the same time, it looks in line with the ROE* they reached during the last 2 years (6.5 % in FY 21 and 6.2 % in FY 20). Of course, the level of P/B can improve in the future, if they can increase the ROE (at this stage, I don't know if this potential exists or not).
* using the underlying NPAT from ordinary activities attributable to members.
PAC Price at posting:
$7.36 Sentiment: Buy Disclosure: Held
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